Liberty Mutual reports sharply higher profit despite cat losses

Liberty Mutual Holding Co. Inc. on Thursday reported first-quarter net income of $856 million, up 64.7% from last year’s first quarter, as strong investment results offset higher catastrophe losses.

The Boston-based insurer’s net written premium grew 3.6% to $10.4 billion, with the increase coming mainly from its Global Retail Markets business, which improved its net premium by 5.2% to $6.85 billion.

In the Global Risk Solutions business, net written premium increased 1% to $3.6 billion and renewal rates grew 12% due to “sustained pricing momentum” in commercial lines, David Long, Liberty Mutual’s chairman and CEO, said in a statement.

The insurer’s overall combined ratio worsened by 5.2 points to 101.5%, largely due to catastrophe losses. The combined ratio for the Global Retail Markets segment worsened to 100.5% from 93.6%, while the combined ratio for the Global Risk Solutions segment improved by 1.2 points to 99.3%.

“Catastrophe losses in the quarter were $1 billion, up $734 million from the prior-year quarter, including $690 million from the February winter storms, which impacted Texas and other states,” Mr. Long said. “Overall, it was a strong quarter despite an elevated level of catastrophe losses, and we are pleased with the progress we’re making toward key business objectives.”